LIVE Wednesday, Dec 13, 2017: Fed Chair Janet Yellen's FOMC press conference scheduled for 2:30 pm EST. Her previous FOMC Press Conference was September 20, 2017 (pdf), video available here.
UPDATE: The U.S. central bank--the Federal Reserve (domain: federalreserve.gov) or "the Fed"--started its two-day monetary policy meeting on Tuesday and its FOMC (Federal Open Market Committee) and on Wednesday made its announcement on interest rates:
"The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on required and excess reserve balances to 1.50 percent, effective December 14, 2017 ... Effective December 14, 2017, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 1-1/4 to 1-1/2 percent, including overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 1.25 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day."--source: Dec 13 Implementation NoteVoting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate. Read more:
FOMC Statement: PDF | HTML; Implementation Note; Projection Materials PDF | HTML
Note: The Fed was expected to hike near-term interest rates, especially after last Friday's strong jobs report.
Roach: Fed Should Move Aggressively to Normalize Rates
Bloomberg.com video above published Dec 11, 2017: Stephen Roach, senior fellow at Yale University, discusses debt levels in Asia, including China, and his outlook for interest rate hikes from the Fed. He speaks on "Bloomberg Daybreak: Asia."
President Trump's nominee, Jerome Powell, will take over as Chair of the Board of Governors of the Federal Reserve System at the end of Janet Yellen's term, subject to confirmation by vote of the full U.S. Senate. On December 5, 2017, the Senate Banking Committee approved Powell's nomination to be Fed Chair in a 22-1 vote, with Senator Elizabeth Warren casting the lone dissenting vote, and therefore his nomination is expected to be confirmed before the next meeting of the FOMC.
- Fed Gets More Ammo for Rate Hikes | WolfStreet.com Dec 12, 2017: "Producer Price Index rises most in six years."
- Investors Told to Brace for Steepest Rate Hikes Since 2006 | Bloomberg.com: Fed, ECB, BOE and SNB set policy in 18-hour window this week--Citigroup and JPMorgan Chase predict average interest rates across advanced economies to increase to at least 1% next year, or the biggest rise since 2006.
- Federal Reserve Overlooks Technology’s Role in Limiting Inflation | WIRED.com: "... on Tuesday, Federal Reserve Chair Janet Yellen made a rather startling admission: The Fed may have “misspecified” its models for inflation and “misjudged” the strength of wages and the job market ..."
- Fed Functions: Promoting Financial System Stability (video): Federal Reserve Board video published Aug 29, 2017: The Federal Reserve performs five key economic functions in the public interest to help promote a healthy economy, including promoting the stability of a financial system that is crucial to the well-being of the U.S. and global economy.
- Fed FAQ: What is macroeconomics? (video): Federal Reserve Board video published Oct 19, 2017.
"The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
"The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
"Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services."--source: federalreserve.gov.